Economic policy

Measures of poverty should be decoupled from average earnings, argues Kristian Niemietz in a new monograph, A New Understanding of Poverty, published by the Institute of Economic Affairs (IEA). Niemietz argues that one perverse result of such relative poverty measures among many is that poverty often declines in a serious recession when the better paid lose their jobs. The author proposes an entirely new way of measuring poverty and argues that if this measure were applied, public policy would orientate itself towards creating the conditions that allowed the poor to become better off. The book can be purchased from the IEA.

See also:
The review of A New Understanding of Poverty by Stewart Lansley and Joanna Mack.

Middle and low income households have missed out on increases in prosperity in the last three decades with the gains going to the rich. As a result the numbers vulnerable to poverty are rising.

In his first speech after becoming Labour’s new leader, Ed Miliband pledged to stand up for the ‘squeezed middle’. There is nothing especially new about Britain’s political leaders attempting to woo the central layer of British society. Mrs Thatcher won the 1979 election by targeting what she called ‘middle England’ and eighteen years later, Labour won the political battle for the centre ground with an appeal to what the popular press dubbed ‘Sierra Man’ or ‘Worcester Woman’.

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